Period costs are never included as part of inventory.

Question

Quizplus · Accepted Answer

Period costs are expenses incurred outside of the production process, such as selling, general, and administrative expenses. These costs are expensed in the period they are incurred and are not included in inventory valuation. In contrast, product costs, including direct materials, direct labor, and manufacturing overhead, are included in inventory valuation as they are related to the production process.

Period Costs Are Never Included as Part of Inventory